Frank Field demands answers over 'reckless' running of Carillion

19 January 2018

A committee of MPs has demanded answers from the trustees of Carillion’s pension scheme and regulators as it opened an investigation into how the company collapsed, leaving behind a retirement scheme with a deficit set to hit £900m.

Frank Field MP, who chairs the work and pensions select committee, said the company’s implosion “begs questions across government” and promised to take evidence from directors and Carillion’s auditor KPMG.

As the committee launched its investigation, some of Carillion’s former staff were thrown a lifeline by Network Rail, which agreed to continue paying contract staff until April.

“It beggars belief that a company can be allowed to run with such apparent recklessness – and be so lucrative for the directors and shareholders – when it has a giant pension deficit and a mountain of debt,” said Field.

Titcomb was asked whether TPR was investigating Carillion and how it reacted to the company’s first profit warning. Carillion’s multiple pension schemes are set to be taken on by the Pension Protection Fund, the government’s lifeboat for retirement schemes that are in deficit when companies go bust.

While the PPF has enough of a surplus to absorb the estimated £900m liabilities, the largest it has ever taken on, pensioners are expected to see their payouts cut by 15%.

A government taskforce has sought to coordinate offers of relief for affected suppliers from banks and Carillion’s corporate clients. On Friday, Network Rail joined Centrica and Nationwide in offering to pay former Carillion contractors until April at least. Train company Arriva said: “We are working closely with Carillion to support their employees at this difficult time, which includes arrangements to ensure staff working on our contracts continue to be paid.”

RBS said on Friday that any affected staff could get refunds on overdraft charges, waivers on withdrawal fees and loan repayments holidays.